Safe and Sound

ALLIANCE

SAN JOSE, CA
3
Star Rating
SAN JOSE, CA-based ALLIANCE is an NCUA-insured credit union founded in 1952. The credit union has assets of $429.8 million, according to June 30, 2017, regulatory filings.

Thanks to the efforts of 99 full-time employees, the credit union holds loans and leases worth $373.7 million. ALLIANCE's 37,107 members currently have $392.6 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, ALLIANCE exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three major criteria Bankrate used to score U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of a credit union's financial resilience. It acts as a bulwark against losses and affords protection for members when a credit union is experiencing economic instability. When it comes to safety and soundness, more capital is better.

ALLIANCE received a score of 8 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, falling short of the national average of 15.26.

ALLIANCE had a capitalization ratio of 8.00 percent in our test, less than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid mortgages.

A credit union with a large number of these kinds of assets could eventually have to use capital to cover losses, decreasing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.

ALLIANCE scored below the national average of 38.15 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

The credit union's ratio of problem assets was 7.00 percent in our test, identical to the national average.

Earnings score

A credit union's profitability affects its safety and soundness. Earnings can be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, likely making the credit union better able to withstand financial shocks. Obviously, credit unions that are losing money have less ability to do those things.

ALLIANCE received below-average marks on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

One sign that the credit union is outperforming its peers in this area was its earnings ratio of 4.00 percent in our test, better than the average for all credit unions.








WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.